Obama wasn’t saying low gas prices cratered the economy. He said prices were low because the economy was cratered.
And Obama effectively said that Romney’s policies might crater the economy again, resulting in low price gases.
I’m no Obama fan, but even I can see the tortured twist Ben Shapiro put on Obama’s words.
Agree, that is also what I heard.
This is the proper conclusion based on Obama's statement. Voting for Obama will keep our gas prices high and potentially make them even higher, given he and his administration keep insisting the economy is improving.
High gas prices increases transportation costs. This impacts delivery of raw materials to manufacturing plants, delivery of finished products to stores, delivery of agriculture products (food) to stores, costs in consumer transportation (cars, buses, ferries, planes (avgas)). This drives up consumer prices.
High gas prices are the result of high crude prices and/or high global demand. Gasoline competes with plastics, heating oil and lubricants for crude. If gas goes up, it's also likely that lube oils are more costly, that heating oils are more costly, which in turn increases the operating costs of manufacturing plants, which also leads to increased consumer prices.
Less money in consumers' pockets due to higher costs results in less commerce for discretionary items. This is what leads to a poor economy.
So what about the idea that low gas prices is a leading indicator of a cratering economy? I don't think so. Gas prices are driven by supply and demand, but crude is also very fungible. If the theory is that a faltering economy uses less gas, and therefore low demand pushes prices down, therefore low prices reflect a poor economy that isn't using energy like it used to, remember that the crude would simply be sent overseas to economies that will use it. Oil companies will not settle for cheaper prices, they will sell the oil at competitive prices in other markets, reducing supply here and keeping prices constant.
Higher prices is the result of low supply as well as higher demand. Eventually, supply will match demand at a market price point. Romney was saying that Obama cut off drilling in the Gulf of Mexico, the east coast, and federal inlands. Obama also blocked the Keystone pipeline from Canada. These all contribute to lower supply, which is driving up prices.
If Obama is saying that lower gas prices means a bad economy, and therefore that higher gas prices means a good economy, he's wrong.
-PJ